Research suggests non-financial companies' collective ratio of cash relative to revenues has hit a seven-year high.

Cash held by non-financial companies in Europe, the Middle East and Africa (EMEA) hit €1trn (£900bn) at the end of 2016, according to new research conducted by Moody's.

In a report for its clients - examining cash holding trends for 699 of its rated regional non-financial companies - the ratings agency noted that the level represented a rise of 6% in year-over-year terms, as the examined companies' collective ratio of cash relative to revenues hit a seven-year high in 2016.

Richard Morawetz, Group Credit Officer for Moody's Corporate Finance Group, said: "EMEA corporate cash balances relative to revenues rose slightly to a seven-year peak of over 15% in total at the end of 2016, as firms hold on to a higher cash cushion than in previous years."

The region's tech sector has the highest ratio at 25%, reflecting its strong free cash-flow generation capacity, he added.

Moody's said the top five cash-rich European companies held 14% of total cash balances in 2016, down from 16% in 2015. This is in contrast to the US, where the share of the top-five cash holders has grown in recent years and accounted for about a third of total cash at end-2016.

Energy, automotive, telecommunications and utilities emerged as the most cash-rich sectors in EMEA, whereas the tech sector dominated in the US.

By geography, the top-five EMEA cash holders were in Germany, France and the UK respectively, who collectively held €514bn; nearly half of the total cash of rated companies domiciled in their respective countries.

On average, Moody's highest 'Aaa or Aa' rated companies each held over €7bn in cash compared with just under €2bn for Baa-rated companies and around €130m for companies rated in the B category.